Efficiency measures of the Chinese commercial banking system using an additive two-stage DEA

Wang, Ke; Huang, Wei; Wu, Jie; Liu, Yingnan

doi:10.1016/j.omega.2013.09.005

Cited by 311 publications

(190 citation statements)

References 45 publications

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“…Therefore, it is important to select the appropriate variables to better reflect the business purpose and banking system of Chinese commercial bank. In previous studies measuring bank efficiency, it is found that there is consensus on the use of variables, except for deposits [36,43]. In other words, the number of employees and fixed assets are commonly used as input variables, and interest income and non-interest income are used as output variables.…”

Section: Input and Output Selectionmentioning

confidence: 99%

The Relationship between the Efficiency, Service Quality and Customer Satisfaction for State-Owned Commercial Banks in China

Chang

Jang

et al. 2017

Sustainability

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Abstract:In 2006, China fully opened up its financial markets. This means that the banking industry is facing a more severe competitive environment, which requires not only the operational efficiency of the bank but also customer satisfaction for the quality of service. As the reform and opening up policy started from the eastern costal areas in China, there are differences in economic development levels by the region, and so are the levels of financial development. Therefore, it is necessary to study the effect of regional differences on bank efficiency. Prior studies also showed a lot of limitations about using data envelopment analysis, in that the efficiencies of the bank are only measured without consideration of other managerial aspects of the service and customer satisfaction. Thus, this study aims to analyze the efficiencies of twenty state-owned commercial banks in five provinces of China. The relationships between bank efficiency, service quality, and customer satisfaction are analyzed. The data used for the analysis was obtained from the 2015 Chinese Banking Statistics. As a result, the average technical efficiency of twenty state-owned banks is as high as 81.9%. It is also found that the bank's service quality has a positive impact on efficiency and customer satisfaction. In the case of banks that are located in areas with high economic levels, customer satisfaction is lower than that of banks in lower regions. This is because customers in high economic level regions have higher expectations for service quality and it leads to lower customer satisfaction.

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Section: Input and Output Selectionmentioning

confidence: 99%

The Relationship between the Efficiency, Service Quality and Customer Satisfaction for State-Owned Commercial Banks in China

Chang

Jang

et al. 2017

Sustainability

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“…The empirical results shown that case bank could adopt the DEA evaluation model as references to upgrade the overall operating performance effectively for creating competitive advantages. Wang et al (2014) utilized network DEA method to evaluate efficiencies of the Chinese commercial banks.…”

Section: Introductionmentioning

confidence: 99%

An application of data envelopment analysis for measuring the relative efficiency in banking industry

Soltanifar

Farhadi²

2014

10.5267/j.msl

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“…We also selected inputs, outputs, and intermediate measures similar to Wang et al (2014), as follows: Inputs include (i) fixed assets (x 1 ), which refer to the asset value of physical capital, and (ii) employee expenses and other operating expenses (x 2 ), which refers to the payment to full-time employees hired and the expense generated during its operation. Outputs include (i) non-interest incomes (y 1 ), which includes fees, commissions, investment, and other business income; (ii) interest incomes (y 2 ), which refers to incomes that are primarily derived from loans.…”

Section: Datamentioning

confidence: 99%

Estimation of potential gains from bank mergers: A novel two-stage cost efficiency DEA model

Shi

Emrouznejad

et al. 2017

Journal of the Operational Research Society

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This paper develops a novel two-stage cost efficiency model to estimate and decompose the potential gains from Mergers and Acquisitions (M&As). In this model, a hypothetical DMU is defined as a combination of two or more candidate DMUs. The hypothetical DMU would surpass the traditional Production Possibility Set (PPS). In order to solve the problem, a Merger Production Possibility Set (PPS M ) is constructed. The model minimizes the total cost of the hypothetical DMU while maintaining its outputs at the current level, and estimates the overall merger efficiency by comparing its minimal total cost with its actual cost. Moreover, the overall merger efficiency could be decomposed into technical efficiency, harmony efficiency, and scale efficiency. We show that the model can be extended to a two-stage structure and these efficiencies can be decomposed to both sub-systems. To show the usefulness of the proposed approach, we applied it to a real dataset of top 20 most competitive Chinese City Commercial Banks (CCBs). We concluded that (1) there exist considerably potential gains for the proposed merged banks. (2) It is also shown that the main impact on potential merger gains are from technical and harmony efficiency. (3) As an interesting result we found that the scale effect works against the merger, indicating that it is not favorable for a full-scale merger.

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Efficiency measures of the Chinese commercial banking system using an additive two-stage DEA

Cited by 311 publications

References 45 publications

The Relationship between the Efficiency, Service Quality and Customer Satisfaction for State-Owned Commercial Banks in China

The Relationship between the Efficiency, Service Quality and Customer Satisfaction for State-Owned Commercial Banks in China

An application of data envelopment analysis for measuring the relative efficiency in banking industry

Estimation of potential gains from bank mergers: A novel two-stage cost efficiency DEA model

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